Daily Stock Pick for June 30, 2023

For the past few days, I’ve been spotlighting non-tech names that have demonstrated just as much growth potential as the tech stocks everybody defaults to when thinking of “growth stocks”.

To close out the trading week, I’m going to share a stock from a sector that was as much the rage in 2022 as AI is in 2023.

I’m talking, of course, about energy.

And to make it a little different from the past few days, the main selling point of today’s daily stock pick is dividends.

Boasting a juicy 7.5% dividend yield and an unparalleled track record of over 24 years of increasing its dividend on an annual basis, this is one stock any savvy income-focused investor would want in their portfolio.



Enterprise Products Partners L.P. (EPD)

Enterprise Products Partners is a Master Limited Partnership (MLP) – a structure that gives it tax benefits, but mandates that it must distribute a certain percentage of its cash flows back to investors to maintain those benefits. It’s sort of like a REIT, except that MLPs are largely in the energy industry.

In EPD’s case, it’s one of the largest midstream players in North America, owning a huge portfolio of pipelines and storage assets. The benefit to being a midstream player is that it’s relatively insulated from the booms-and-busts of the commodity cycle, which makes it a more attractive long-term income play.

And when it comes to long-term income, EPD’s track record may be one of the best there is. 24 consecutive years of increasing annual distributions – and still commanding a juicy 7.5% yield.

On top of that, its cash flow is almost double that of its distribution – which significantly derisks the business by giving it plenty of breathing room. Its debt-to-EBITDA ratio is also among the lowest in its peer group.

In sum, if you’re looking for a stable long-term income play, consider EPD.

To your wealth,
Felix @ Ace of Investing

P.S. This newsletter will resume on Wednesday, July 5. Have a fantastic 4th of July weekend – God bless America!